Barry Diller's People Inc., formerly known as IAC, has formally offered to acquire casino giant MGM Resorts for $48.30 per share in cash. The proposal values MGM Resorts at approximately $18 billion. People Inc. already holds a significant 26.1% stake in MGM, which operates major Las Vegas properties including the Bellagio and Aria.
Diller, who serves as chairman of People Inc. and is also a member of the MGM Resorts board, stated in a letter to the MGM board of directors that he would recuse himself from any board actions related to the proposed deal. The offer follows earlier reports, with CNBC's Andrew Ross Sorkin having previously reported that a bid could emerge as early as Monday.
In a news release, Diller articulated the rationale behind People Inc.'s long-term interest in MGM. He said, "We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities." He further expressed his belief that the market currently undervalues the company, stating, "We continue to believe the market materially undervalues the power and durability of MGM's assets." Diller also conveyed confidence in MGM's management team, seeing a compelling opportunity to support the company's growth and unlock its full value.
Following the news of the offer, shares of MGM Resorts experienced a significant surge, closing up approximately 15% on Monday. Concurrently, shares of Diller's firm, People Inc., also saw a positive movement, closing up 1%. This strategic move by People Inc. highlights an effort to capitalize on what the firm perceives as an undervalued asset with both a strong physical presence and digital potential within the evolving entertainment and hospitality sectors.
